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The San Francisco for-profit coding academy Bloom Institute of Technology plans to
lay off
60 employees by early next year, a filing with the state’s Employment Development Department shows.
TechCrunch first
reported
the layoffs, reporting around half the company’s employees would lose their jobs. The company also went through a round of layoffs last year.
Also called Bloom Tech, the company
changed its name
last year from Lambda School. It did not respond to an emailed request for comment.
The notice to state workforce authorities said the company will permanently lay off employees in a range of roles, from career coaches and curriculum designers, to software engineers and human resources professionals.
The cuts come as the tech industry at large has started making massive cuts as markets and investments trend down. But Bloom Tech has faced a series of
lawsuits
from former students over the quality of its instruction, and repayment plans that some former students say have buried them in debt without placing them into promised lucrative tech careers.
A
lawsuit
filed in San Francisco earlier this year also named the company’s CEO Austen Allred as a defendant, a departure from previous cases brought in private arbitration against the company itself.
Filed on behalf of a former student, Emily Bruner, that suit said she was persuaded by Allred’s active Twitter presence where he promoted stories of past successful students.
She enrolled in the company’s courses and signed an Income Sharing Agreement that required her to repay the school for her courses once she got a job in tech paying more than $50,000 per year, at a rate of 17% of her salary for 24 months capped at $30,000, the suit said. Instead, she alleged she was given subpar instruction and rejected from tech companies for having insufficient coding skills.
Allred and the company have stood by their placement
rates
in the past.
When the company changed its name last year, while facing three arbitration cases from former students, it also said it would reform its payment plans, including one where students who aren’t making $50,000 a year after graduating are paid back their money plus a 10% premium.
The company also faced scrutiny in the past over its “We don’t get paid until you do” claim that persuaded some students to sign up, according to lawsuits. A
report
published by Wired found the company had in fact sold rights to student repayment contracts to generate cash up front.
Bloom Tech, then still called Lambda School, has also faced fines from state education regulators in the past for failing to properly register itself as an educational institution. The company said it paid the fine and was ultimately not shut down by the California Bureau for Private Postsecondary Education after initially being told to do so.
Chase DiFeliciantonio is a San Francisco Chronicle staff writer. Email: chase.difeliciantonio@sfchronicle.com Twitter: @ChaseDiFelice
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